Tuesday, October 23, 2012

In one week’s time, unless something strange happens, a far-reaching
Canada-China investment agreement will take effect. It’s one of the most
important commercial agreements Canada has signed since NAFTA. But
whereas NAFTA could be terminated on six months’ notice, this deal locks
in the signatories for a minimum of 15 years.

It’s tantamount, you might say, to a commercial bill of rights for
China in this country – an economic meshing on our part with the
authoritarian Asian giant, giving it potentially considerable weight in
the pace and scale of our resource development.
The problem is,
few know much about the deal. It’s being rammed through the
parliamentary system without scrutiny, foisted on the business
community, the opposition parties and the country with hardly a word of
debate or a vote. Our role is to accept it on faith – to take the
government’s word for it.

In fact, while opponents are up in arms,
this deal may be a good thing. Canada gets better access to the world’s
emerging economic mega-power. Our investors there get rights and
protections they didn’t have before. We’ve been trying to get a China
investment deal since the mid-1990s.

But how are we to know if the
pluses outweigh the negatives without public examination? This
agreement didn’t even make it into one of those democracy-shredding
omnibus bills the Conservatives have become so fond of.

The debate
in this country has been dominated by the proposed Chinese takeover of
Calgary’s Nexen Inc. to the extent that few commentators have paid much
heed to the investment deal (though Postmedia’s Michael Den Tandt has
called the pact’s secrecy mind-boggling). Nexen is important. But it’s a
tree. The investment deal is the forest.

So far, all we’ve had is
a brief appearance by some trade officials before a parliamentary
committee. The government has blocked all other avenues of debate, save
to say the opposition parties could devote an opposition day to it.
While it’s true that investment agreements are typically of long
duration and don’t require parliamentary approval, this is China, not
Denmark.

Opponents say the agreement is lopsided in China’s
favour. Opposition is being led by Osgoode Hall professor Gus Van
Harten, who is one of our very few authorities on the complexities of
investment treaties and who has written a 14-point letter to the Prime
Minister detailing its failings. The Green Party’s Elizabeth May, a
long-time trade policy watcher, has been leading the House of Commons
charge along with NDP trade critic Don Davies, who says his leader’s
office has received 15,000 e-mails questioning the agreement.

One
of the protestations is that national treatment clauses heavily favour
Beijing. The Chinese have far more domestic barriers and restraints to
trade than does Canada. Investors in China are required in many
instances to use local suppliers and labour. Not so investors in Canada.

Another
major sore point is the dispute settlement process. Unlike most other
investment pacts, this one allows for settlements behind closed doors.
As incredible as it sounds, Prof. Van Harten says, Chinese asset owners
in Canada “will be able, at their option, to challenge Canadian
legislative, executive or judicial decisions outside of the Canadian
legal system and Canadian courts.”

In that Chinese investment in
Canada far outweighs Canadian investment in China, critics say there’s
no reciprocity in this deal. Usually, the capital-importing position
under such treaties is occupied by a developing or transition economy.
In this case, the capital importer being Canada, there are many
vulnerabilities.

McGill University’s Armand de Mestral, also a
specialist in investment deals, isn’t as worked up about the pact as
Prof. Van Harten. But Ottawa’s handling of it, he says, is unwarranted.
Other governments report regularly to their parliaments on their
investment deals. The Harper Conservatives promised to open up the
process, he notes, but have failed to do so.

The answer is "it's just not the Harper way" to allow any kind debate. Remember it's Harper that makes all of the rules. Oh ya, it's called a strong stable Conservative majority government. We do have a government that is as promised right? Open, honest and accountable if my memory serves me right.

EVENTS

Income Trust Halloween VigilThanks to all who participated in both the Ottawa and Calgary vigils to mark the anniversary of the announcement.

WE"D LIKE SOME ANSWERS

As you well know, the ‘income trust thing’ has grown beyond the
question of whether fair taxes are paid on income from trusts. It’s
become a giant dirty snowball, and as it rolls forward it accumulates
more and more bulk. There are so many unanswered questions. Let's list a few and invite our "Accountable" government and our free press to provide some much-needed answers.

It is said “Trusts are inefficient use of capital. Why?” Two
related questions are ‘Whose money is it, anyway?’, and ‘Do Canadian
investors have a free and efficient market?’

How can information that is already in the public domain at SEDAR
make for a state secret? How could such information be used to harm
the Canadian national interest? And who would cause the harm?

Why won’t the Canadian media investigate the falsehoods and
misrepresentations told by the Minister of Finance to a committee of
Parliament? Was the Minister in contempt of Parliament?

Why won’t the Canadian media report (a) government tax revenues
gained from BCE in 2006 when BCE was a corporation to (b) government
tax revenues that would be gained in 2007 from BCE, if BCE had been
allowed to proceed to a trust, and (c) government tax revenues that
will be gained in 2007 from BCE, when BCE ownership has been carved
up as 45% foreign ownership and 55% large Canadian pension fund
ownership?